Camra trust to fund micro-breweries

The Camra Investment Club (CIC) is looking at setting up a £10m venture-capital trust (VCT) to fund the expansion of micro-brewers, the MA has learnt.

Investments would fund everything from extending breweries to buying a brewery tap pub. The idea is being touted as "one of the big turning points in Camra's history".

CIC spokesman Neil Kellett said there might be as many as 30 or 40 micro breweries interested in taking advantage of investment through this route - a minimum investment of £100,000 per micro would be offered.

A unnamed broker, with experience of the smaller brewer sector, is already working on a feasibility study.

The Society of Independent Brewers (SIBA) is understood to have given the scheme its backing in principle.

CIC, which invests in brewery stocks, currently has 3,000 members and each year around £1m is contributed to the fund - total sector holdings stand at around £9.5m.

Kellett said that there are 170-odd members of the CIC who have holdings worth more than £10,000. He added: "We believe these members might have money they want to invest - these holdings are not the widows and orphans kind of investment.

"Lots of micro-brewers are reluctant to take the next step in expansion terms because they are frightened of banks.

"The venture-capital trust will be run by people who are familiar with the industry."

A VCT offers numerous tax advantages for investors, including 30% tax relief after five years on sums up to £200,000.

Details of the scheme are still being worked on but the Investment Club, which would invest an initial £50,000 itself, would like to launch the VCT mid-way through 2007.

Under the rules of VCTs, 70% of the initial money has to be invested within three years of its setting up - or returned to investors.

"I believe this is one of the most exciting things ever to have happened in the brewing industry," said Kellett.